The Southeast Asian billet market has posted some softening this week, as confirmed in a few deals. Most traders have started to lose confidence, seeing the weakening of the Chinese market and the absence of supportive factors for the market to grow.
Around 20,000 mt of ex-Malaysia 5SP billet have been traded to the Philippines at an average of $527/mt CFR. Late last week, there were reports of negotiations and a 10,000 mt sale at “close to $530/mt CFR.” Moreover, another trade for 20,000 mt of 3SP billet also from an IF-based producer has been done at $520/mt CFR Manila. These IF billet sales have cooled down the previous positive sentiments in the market.
Offers for BF billets to the Philippines have softened to $545-550/mt CFR, with only some staying at $555/mt CFR, while last week they were at $550-560/mt CFR. “A Dexin deal at $542/mt CFR supported the market. After that, buyers were considering [tradable BF 5SP billet level] in the low $540s/mt CFR. Now sellers won't get $540/mt CFR because of the Malaysian deals,” a Manila-based source said. Lower offers from traders have come even though the main Indonesian mill has in contrast increased its offers since last week. "Dexin are having their annual retreat in Bali this week and all their customers and traders are there. Hence, Dexin is very quiet this week," another source said. The current CFR-based offers are translating to $525-530/mt FOB at the highest, so close to the producer’s latest deals, but much lower than the current offers at $540-545/mt FOB. “With the current situation in China, they [both mills and traders] will not get any higher levels here,” an international trader based in Asia said.
The SteelOrbis reference price for imported billet in Southeast Asia has settled at $533-537/mt CFR, down $5/mt CFR on average over the past week.
The latest offers for ex-Iran billet to both Indonesia and Thailand have been at $520-525/mt CFR, almost in line with the last deal for 40,000 mt to Indonesia, as reported earlier. But interest has been slow now, with Thai buyers voicing bids at $500-510/mt CFR at the highest, while Indonesian re-rollers have restocked for now.
A deal for 20,000 mt of billet from Russia’s Far East region has been signed at $525/mt CFR to Taiwan recently, with the level below that targeted by the mill earlier at $530-535/mt CFR, but almost in line with the previous deals for commercial grade Russian billet done in the first half of December at $520-525/mt CFR Taiwan.
